to establish the Financial Intelligence Centre and provide for its functions and powers; provide for the duties of supervisory authorities and reporting entities; and provide for matters connected with, or incidental to, the foregoing.

[29th November, 2010]

Act 46 of 2010,

Act 4 of 2016.

[General Note— Section 28 of the Act 4 of 2016 deleted the word "Director" in all references to the Director of the Centre and substituted therefor the word "Director-General.]

PART IPRELIMINARY

1. Short title

This Act may be cited as the Financial Intelligence Centre Act.

2. Interpretation

(1) In this Act, unless the context otherwise requires—

“account” means any facility or arrangement by which a reporting entity does any of the following—

(a) accepts deposits of funds or other assets;

(b) allows withdrawals or transfers of funds or other assets; or

(c) pays negotiable or transferable instruments or orders drawn on, or collects negotiable or transferable instruments or payment orders on behalf of, any other person; and includes any facility or arrangement for a safety deposit box or for any other form of safe deposit;

“bearer negotiable instrument” includes a monetary instrument in bearer form such as a traveller’s cheque, negotiable instrument, cheque, promissory note, money order, electronic funds transfer and digital currency, that is—

(a) in bearer form;

(b) endorsed without restriction;

(c) made out to a fictitious payee or in such form that title thereto passes upon delivery;

(d) an incomplete negotiable instrument, including a bill of exchange, cheques and money order signed, but with the payee’s name omitted;

[Subs by s 2(c) of Act 4 of 2016.]

“beneficial owner” means an individual—

(a) who owns or effectively controls a client of a reporting entity, including the individual on whose behalf a transaction is conducted; or

(b) who exercises effective control over a legal person or trust;

[Subs by s 2(c) of Act 4 of 2016.]

“business relationship” means an association entered into between a client and a reporting entity for commercial or transactional purposes;

[Ins by s 2(d) of Act 4 of 2016.]

“Centre” means the Financial Intelligence Centre established under section 3;

“client” means a person who has entered into a business relationship or a single transaction with a reporting entity;

[Ins by s 2(d) of Act 4 of 2016.]

“close associate” includes an individual who—

(a) is known to have joint beneficial ownership or control of a legal entity or legal arrangement, or any other close business relation, with a politically-exposed person; and

(b) has sole beneficial ownership or control of a legal entity or legal arrangement which is known to have been set up for the benefit of a politically-exposed person;

[Ins by s 2(d) of Act 4 of 2016.]

“customer” means any of the following—

(a) the person for whom a transaction or account is arranged, opened or undertaken;

(b) a signatory to a transaction or account;

(c) any person to whom an account or rights or obligations under a transaction have been assigned or transferred;

(d) any person who is authorised to conduct a transaction or control an account;

(e) any person who attempts to take any of the actions referred to in paragraphs (a) to (d); or

(f) such other person as may be prescribed by the Minister;

“currency” means the coin and paper money of the Republic, or of a foreign country, that is designated as legal tender or is customarily used and accepted as a medium of exchange;

“data message” has the meaning assigned to it in the Electronic Communications and Transactions Act, 2009;

“designated non-financial business or profession” includes—

(a) a motor vehicle dealer;

(b) a casino or gaming operator;

(c) a precious stone or metal dealer;

(d) a non-governmental organisation;

(e) a real estate agent;

(f) an accountant or auditor, who is a sole practitioner or partner in an accounting or auditing firm;

(g) a legal practitioner, who is a sole practitioner or partner in a firm; or

(h) any other business or profession in which the risk of money laundering and terrorist financing exits, as the Minister may by statutory instrument designate on the advice of the Centre;

[Ins by s 2(d) of Act 4 of 2016.]

“Director-General” means the person appointed as such under section 9;

[Am by s 28 of Act 4 of 2016.]

“financial institution” has the meaning assigned to it in the Banking and Financial Services Act;

“financial instrument” means an instrument capable of representing a monetary value, and includes money, bonds, bills and notes;

“foreign designated authority” means the authority designated for the receipt, requesting, analysis and dissemination of disclosures of suspicious transaction reports in a foreign country;

“funds or other assets” means financial assets, property of every kind, whether tangible or intangible, moveable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such funds or other assets, including but not limited to bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts or; letters of credit, and any interest, dividends or other income on or value accruing from or generated by such funds or other assets;

“high-risk customer” includes—

(a) a non-resident customer;

(b) a private banking customer;

(c) a legal person or legal arrangement that is a personal asset holding vehicle;

(d) a politically-exposed person;

(e) a company that has a nominee shareholder or shares in bearer form; or

(f) a customer that performs a transaction on behalf of another person, whether the identity of such other person is disclosed or not;

[Ins by s 2(d) of Act 4 of 2016.]

“immediate family member” in relation to an individual includes—

(a) a spouse;

(b) a sibling;

(c) a child and where applicable the spouse of a child; and

(d) a parent;

[Ins by s 2(d) of Act 4 of 2016.]

“law enforcement agency” means—

(a) the Zambia Police Force, established under the Constitution;

(b) the Zambia Security Intelligence Service established under the Zambia Security Intelligence Service Act;

(c) the Immigration Department established under the Immigration and Deportation Act, 2010;

(d) the Drug Enforcement Commission, established under the Narcotic Drugs and Psychotropic Substances Act;

(e) the Anti-Money Laundering Investigations Unit established under the Prohibition and Prevention of Money Laundering Act, 2001;

(f) the Anti-Corruption Commission established under the Anti-Corruption Act, 2010;

(g) the Zambia Revenue Authority established under the Zambia Revenue Authority Act; an

(h) any other investigative institution that the Minister may, by statutory instrument, designate;

“law enforcement officer” means an officer of a law enforcement agency;

“legal arrangement” means to express trusts or other similar legal arrangements;

“legal person” means an entity other than a natural person that can establish a permanent customer relationship with a financial institution or otherwise own property;

[Ins by s 2(d) of Act 4 of 2016.]

“legal practitioner” has the meaning assigned to it in the Legal Practitioners Act;

“money laundering” has the meaning assigned to it in the Prohibition and Prevention of Money Laundering Act, 2001;

“negotiable instrument” means an instrument such as a cheque, bill of exchange or promissory note, that embodies a right to payment and satisfies the requirements for negotiability under a law governing negotiable instruments;

[Ins by s 2(d) of Act 4 of 2016.]

“non-governmental organisation” has the meaning assigned to it in the Non-Governmental Organisations' Act, 2009;

[Ins by s 2(d) of Act 4 of 2016.]

“officer” means an officer of the Centre or a law enforcement officer authorised by the Centre to carry out a function under this Act;

“originator” means the account holder or, where there is no account, the person that places the order to perform a wire transfer with a financial institution;

[Ins by s 2(d) of Act 4 of 2016.]

“political party” means an association or organisation whose objectives include the contesting of elections in order to form government or influence the policy of the national or local government;

[Ins by s 2(d) of Act 4 of 2016.]

“politically-exposed person” means—

(a) an individual who holds, or has held, public office, and includes—

(i) a Head of State or Government;

(ii) a Minister;

(iii) a Deputy Minister;

(iv) a politician;

(v) a political party official;

(vi) a judicial official or other senior official of a quasi-judicial body;

(vii) a military official;

(viii) a member of an administrative, management or supervisory body of a State owned enterprise;

(b) an individual who is, or has been, entrusted with a public function by a State, public body or a local or international organisation;

(c) an immediate family member of a person referred to in paragraph (a); or

(d) a close associate of a person referred to in paragraph (a);

[Ins by s 2(d) of Act 4 of 2016.]

“private body” means any person or organisation other than a public body, and includes a voluntary organisation, a charitable institution, company, partnership or a club;

“proceeds of crime” has the meaning assigned to it in the Forfeiture of Proceeds of Crime Act, 2010, and the Prohibition and Prevention of Money Laundering Act, 2001;

“proliferation” means an act by any person who by any means, directly or indirectly, willfully or negligently provides funds or financial services with the intention that the funds or financial services should be used or knowing that they are to be used in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials, including both technologies and dual use of goods used for non-legitimate purpose;

[Ins by s 2(d) of Act 4 of 2016.]

“public body” means the Government, any Ministry or department of the Government, a local authority, commission or other body appointed by the Government, established by, or under, any written law or in which the Government has an interest;

“public function” means a function performed by a public officer in a public body in an official capacity in relation to the public body;

[Ins by s 2(d) of Act 4 of 2016.]

“public office” means an office occupied by a person in a public body;

[Ins by s 2(d) of Act 4 of 2016.]

“record” means any material on which information is recorded or marked and which is capable of being read or understood by a person, or by an electronic system or other device;

“reporting entity” means—

(a) an institution regulated by a supervisory authority; or

(b) an institution or designated non-financial business or profession supervised by the Centre pursuant to section 5;

[Subs by s 2(c) of Act 4 of 2016.]

“sanction” includes a fine, suspension, de-registration or any other penalty that may be prescribed by, or under, this Act, but does not include imprisonment;

“serious offence” has the meaning assigned to it in the Forfeiture of Proceeds of Crime Act, 2010;

“shell bank” means a bank that has no physical presence in the country in which it is incorporated and licensed, unless such bank is wholly owned by one or more financial institutions forming part of a regulated financial services group that is subject to effective consolidated supervision;

“supervisory authority” means—

(a) the Governor of the Bank of Zambia appointed under the Bank of Zambia Act;

(b) the Registrar of Co-operatives appointed under the Co-operatives Act, 1998;

(c) the Registrar of Pensions and Insurance appointed under the Pension Scheme Regulation Act, 1996;

(d) the Commissioner appointed under the Securities Act;

(e) the Registrar appointed under the Patents and Companies Registration Agency Act, 2010;

(f) the Commissioner of Lands;

(g) the Zambia Development Agency, established under the Zambia Development Agency Act, 2006;

(h) the licensing committee established under the Tourism and Hospitality Act, 2007;

(i) the Registrar of Estate Agents appointed under the Estate Agents Act, 2000;

(j) the Law Association of Zambia established under the Law Association of Zambia Act;

(k) the Zambia Institute of Chartered Accountants established under the Accountants Act, 2008; and

(l) any other authority established under any written law as a supervisory authority or as the Minister may prescribe;

“suspicious transaction report” means a report submitted on suspected money laundering, financing of terrorism or proliferation or other serious offence or attempted money laundering, financing of terrorism or proliferation or other serious offence, whether in form of a data message or otherwise;

[Am by s 2(b) of Act 4 of 2016.]

“terrorism” has the meaning assigned to it in the Anti-Terrorism Act, 2007;

“transaction” means a purchase, sale, loan, pledge, gift, transfer, delivery or other disposition, or the arrangement thereof, and includes—

(a) opening of an account;

(b) any deposit, withdrawal, exchange or transfer of funds in any currency whether in cash or by cheque, payment order or other instrument or by electronic or other non-physical means;

(c) the use of a safety deposit box or any other form of safe deposit;

(d) entering into any fiduciary relationship;

(e) any payment made or received in satisfaction, in whole or in part, of any contractual or other legal obligation;

(f) any payment made in respect of a lottery, bet or other game of chance;

(g) establishing or creating a legal person or legal arrangement;

(h) entering into a transaction involving real property; and

(i) such other transaction as may be prescribed by the Minister, by statutory instrument; and

“wire transfer” means a transaction carried out on behalf of an originator who may be the beneficiary, through a financial institution, including an institution that originates the wire transfer and an intermediary institution that participates in completion of the transfer, by electronic means, with a view to making an amount of money available to a beneficiary at another financial institution.

["wire transfer" subs by s 2(c) of Act 4 of 2016.]

(2) An individual is deemed to own or effectively control a client if the individual—

(a) owns or controls, directly or indirectly, including through trusts or bearer shareholding for any legal person, 25 percent or more of the shares or voting rights of the entity;

(b) together with a connected person, owns or controls, directly or indirectly, including through trusts or bearer shareholding for any legal person, 25 percent or more of the shares or voting rights of the entity;

(c) despite a less than 25 percent share-holding or voting rights, receives a large percentage of the person’s declared dividends; or

(d) exercises control over the management of the person in that person’s capacity as executive officer, non-executive director, independent non-executive director, director, manager or partner.

[S 2(2) ins by s 2(e) of Act 4 of 2016.]

PART IITHE FINANCIAL INTELLIGENCE CENTRE

3. Establishment of Financial Intelligence Centre

(1) There is hereby established the Financial Intelligence Centre which shall be a body corporate with perpetual succession and a common seal, capable of suing and being sued in its corporate name, and with power, subject to the provisions of this Act, to do all such things as a body corporate may, by law, do or perform.

(2) The Schedule applies to the Centre.

4. Seal of Centre

(1) The seal of the Centre shall be such device as may be determined by the Board and shall be kept by the Secretary.

(2) The affixing of the seal shall be authenticated by the Chairperson or the Vice Chairperson and any other person authorized in that behalf by a resolution of the Board.

(3) Any document purporting to be made under the seal of the Centre or issued on behalf of the Centre shall be received in evidence and shall be deemed to be so executed or issued, as the case may be, without further proof, unless the contrary is proved.

5. Functions of Centre

(1) The Centre is the sole designated national centre authorised to receive, request for, analyse and disseminate suspicious transaction reports, including information from foreign designated authorities, made to the Centre under this Act or any other written law.

(2) Despite the generality of sub-section (1), the functions of the Centre are to—

(a) receive, request, analyse and evaluate suspicious transaction reports and information from any other source authorised under any written law to make a suspicious transaction report including a foreign designated authority to determine whether there are reasonable grounds to transmit reports for investigation by law enforcement agencies or foreign designated authorities;

(b) disseminate information to law enforcement agencies where there are reasonable grounds to suspect money laundering or financing of terrorism or proliferation;

(c) provide information relating to suspicious transactions to any foreign designated authority, subject to such conditions as the Director-General may determine, in accordance with this Act;

(d) provide information, advice and assistance to law enforcement agencies in furtherance of an investigation;

(e) educate the public and reporting entities of their obligations and inform them of measures to detect, prevent and deter money laundering and financing of terrorism or proliferation;

(f) provide information to investigating authorities, supervisory bodies, law enforcement agencies and any other competent authority to facilitate law enforcement for prevention of money laundering and financing of terrorism or proliferation;

(g) ensure compliance with this Act and regulations, directives, determinations, notices and circulars issued by the Centre or supervisory authorities, and give guidance to reporting entities to combat money laundering or financing of terrorism or proliferation activities;

(h) facilitate effective supervision and enforcement of this Act by supervisory authorities; and

(i) perform such other functions as are necessary to give effect to this Act.

(3) The Centre may, in performing its functions under this Act—

(a) cooperate and exchange information with, or enter into an agreement or arrangement, in writing, with a foreign designated authority, supervisory authority, law enforcement agency or other relevant authority to facilitate the discharge or performance of its functions under this Act;

(b) conduct inquiries related to suspicious transacting on behalf of foreign designated authorities and notify them of the outcome;

(c) access, directly or indirectly, on a timely basis, financial, administrative and law enforcement information required for the better carrying out of its functions under this Act;

(d) consult with any relevant person, legal person or legal arrangement for the purpose of exercising its functions and powers under this Act;

(e) request information and statistics from a supervisory authority, law enforcement agency, public body, regulatory agency, person or legal arrangement for purposes of this Act or any other law, where the information is required for the discharge of its functions under this Act or for purposes of the Act;

(f) request a law enforcement agency or competent authority to report progress and outcomes on matters referred to it by the Centre;

(g) in consultation with a supervisory authority, where applicable, cause an inspection to be made by an officer authorised by the Director-General in writing;

(h) provide a law enforcement agency or supervisory authority with information derived from an inspection carried out pursuant to paragraph (g), if there are reasonable grounds to suspect that a transaction involves money laundering, financing of terrorism or proliferation or any other serious offence; and

(i) supervise and enforce compliance with this Act or any directive made in terms of this Act by reporting entities that—

(i) are not regulated or supervised by a supervisory authority in terms of this Act or any other law; or

(ii) are regulated or supervised by a supervisory authority in terms of this Act or any other law, if that supervisory authority fails or neglects to enforce compliance.

(4) An officer authorised to conduct an inspection under paragraph (g) of sub-section (3) may exercise the powers of an inspector provided for under section 11B.

[S 5 subs by s 3 of Act 4 of 2016.]

6. Extent of Centre’s autonomy

(1) Subject to sub-section (2), the Centre shall not, in the performance of its functions under this Act or any other law, be subject to the direction or control of any person or authority.

(2) The Minister may, in writing, give to the Centre such directions as the Minister considers necessary in the public interest and the Centre shall give effect to those directions to the extent that they are not inconsistent with this Act.

7. Board of Centre

(1) There shall be a Board of the Centre which shall consist of the following part-time members—

(a) the Chairperson;

(b) the Vice-Chairperson; and

(c) three other persons.

(2) A person shall not be qualified to be appointed to the Board unless the person has not less than 10 years experience in a field connected with financial analysis, law, accounting, forensic auditing, financial investigation, law enforcement or any other field as the Minister may determine.

(3) The Board members shall be appointed by the President.

(4) The<PN:"Director-General Director-General shall be the secretary to the Board.

(5) The Schedule applies to the Board.

8. Functions of Board

(1) Subject to the other provisions of this Act, the functions of the Board are to—

(a) monitor and review the administrative performance of the Centre in the carrying out of its functions under this Act;

(b) approve policies for the proper administration and management of the Centre;

(c) review the implementation of cooperation agreements between the Centre and domestic or foreign designated authorities;

(d) consider and approve the proposed budget of the Centre; and

(e) perform such other functions as are necessary to give effect to this Act.

[S 8(1) subs by s 4 of Act 4 of 2016.]

(2) Notwithstanding sub-section (1), the Board may delegate to the <PN:"Director-GeneralDirector-General or to any committee of the Board, any of its functions under this Act.

9. <PN:"Director-GeneralDirector-General

(1) The Board shall, subject to the approval of the Minister, appoint a <PN:"Director-GeneralDirector-General who shall be the chief executive officer of the Centre, on such terms and conditions as the Board may determine.

(2) A person shall not be qualified to be appointed <PN:"Director-GeneralDirector-General unless the person has not less than 10 years experience in a field connected with financial analysis, law, accounting, forensic auditing, financial investigation, law enforcement or any other field as the Board may determine.

(3) The Director-General is responsible for—

(a) the administration and management of the Centre;

(b) appointing of the staff of the Centre;

(c) the performance of the functions of the Centre; and

(d) the implementation of the decisions of the Board.

[S 9(3) subs by s 5 of Act 4 of 2016.]

(4) The <PN:"Director-GeneralDirector-General shall not, while the <PN:"Director-GeneralDirector-General holds the office of <PN:"Director-GeneralDirector-General, discharge the duties of any other office of emolument in the Republic.

(5) The <PN:"Director-GeneralDirector-General may, subject to any specific or general direction of the Board, make standing orders providing for—

(a) the control, direction and administration of the Centre;

(b) the discipline, training, classification and promotion of officers of the Centre;

(c) the duties of officers of the Centre; or

(d) such other matters as the <PN:"Director-GeneralDirector-General may consider necessary or expedient for preventing the abuse of power or neglect of duty by officers or other staff.

(6) The <PN:"Director-GeneralDirector-General shall, on appointment, take an oath or affirmation before the Chief Justice in the prescribed manner and form.

10. Powers of Director-General

(1) The Director-General or an officer authorised by the Director-General may, for the performance of the Centre’s functions under this Act request—

(a) financial information from a reporting entity to be provided within such time as the Director-General or an officer authorised by the Director-General may specify, which is relevant to enable the Centre to fulfill its functions;

(b) a reporting entity to disclose whether—

(i) a person is or has been a client of the reporting entity;

(ii) a person is acting or has acted on behalf of a client of the reporting entity; or

(iii) a client of the reporting entity is acting or has acted on behalf of another person;

(c) such further information as the centre may require for the performance of the centre’s functions under this Act;

(d) an employee or agent or former employee or former agent of a reporting entity being inspected to—

(i) give to the inspector reasonable assistance in connection with the inspection;

(ii) appear before the inspector for examination concerning matters relevant to the inspection; or

(iii) produce a book or document relating to the affairs of the reporting entity.

(2) Where the information requested under sub-section (1) is classified under the State Security Act, the Centre may apply to a judge in chambers to determine whether the information is likely to—

(a) prejudice the security, defence or international relations of the Republic; or

(b) involve the disclosure of any matter or deliberations of a secret or confidential nature of the Government.

(3) Where the Director-General reasonably suspects that a transaction relates to money laundering, financing of terrorism or proliferation or any other serious offence or the commission of a serious offence, the Director-General may order a reporting entity to freeze an account or suspend a transaction, as the case may be, for a period not exceeding 15 days.

(4) A person aggrieved with the decision of the Director-General to freeze an account or suspend a transaction may after 72 hours apply to a judge in chambers to discharge the order of the Director-General and shall serve a notice on the Director-General to join the proceedings but such order shall remain in full force and effect until the judge determines otherwise.

(5) A person who contravenes sub-section (3) commits an offence and is liable, upon conviction, to a fine not exceeding three hundred thousand penalty units or to imprisonment for a period not exceeding three years, or to both.

(6) A person who contravenes the provisions of this section commits an offence and is liable, upon conviction, to—

(a) in case of a natural person, a fine not exceeding two hundred thousand penalty units or to imprisonment for a term not exceeding two years or to both; or

(b) in the case of a body corporate, a fine not exceeding two hundred and fifty thousand penalty units.

[S 10 subs by s 6 of Act 4 of 2016.]

11. Officers and other staff

(1) The Director-General may appoint, on such terms and conditions as it may determine, such officers and other staff as may be necessary to assist the <PN:"Director-GeneralDirector-General in the performance of the <PN:"Director-GeneralDirector General’s functions under this Act.

[S 11(1) am by s 7 of Act 4 of 2016.]

(2) The <PN:"Director-GeneralDirector-General may, if satisfied that it is in the best interest of the Centre, terminate the appointment of any officer of the Centre and shall assign the reasons therefor, subject to any directions by the Director-General.

[S 11(2) am by s 7 of Act 4 of 2016.]

(3) The Centre may engage the services of such advisors and experts as it considers necessary.

(4) The advisors, experts and other members of staff shall on appointment, take an oath or affirmation before the <PN:"Director-GeneralDirector-General in the prescribed manner and form.

11A. Inspectors

(1) The Centre shall for the purposes of ensuring compliance with the provisions of this Act, establish an inspectorate with the necessary technical staff and facilities required to administer, monitor and enforce measures to detect, prevent and deter money laundering and financing of terrorism or proliferation.

(2) The Director-General may, on such terms and conditions as the Board may determine, appoint suitably qualified persons as inspectors for the purposes of this Act.

(3) The Director-General shall provide an inspector with a certificate of appointment and an identity card, in the prescribed form, which shall be prima facie evidence of the inspector’s appointment as such.

(4) An inspector shall, in performing any function under this Act—

(a) be in possession of the certificate of appointment referred to in sub-section (3); and

(b) show the certificate of appointment to a person who requests to see it or is subject to an inspection under this Act.

(5) Where the head of a supervisory authority is permitted by another law to appoint inspectors under that law, the head of the supervisory authority may extend the appointment and functions of the inspectors under that law to include the undertaking of inspections in accordance with this Act.

(6) An inspector whose appointment or functions are extended under sub-section (5) may, in undertaking inspections under this Act, in addition to the functions conferred upon the inspector under the other law, perform the functions of an inspector under this Act.

(7) An extension of appointment made pursuant to sub-section (5) shall be indicated in the certificate of appointment issued by the head of the supervisory authority to the inspector.

(8) An inspector shall, on appointment, take an oath or affirmation before the Director-General in the prescribed manner and form.

[S 11A ins by s 8 of Act 4 of 2016.]

11B Powers of inspector

(1) An inspector may, during the operating hours of the reporting entity or designated non-financial business or profession—

(a) enter and search any facility, plant, undertaking, business or other premises of a reporting entity or designated non-financial business or profession where the inspector has reasonable grounds to believe information or documents which are relevant to an inspection are kept or an activity of money laundering or financing of terrorism or proliferation is being carried out or is likely to be carried out;

(b) examine a document, record, material, matter, substance or article found in a reporting entity or an undertaking, business or other premises of a designated non-financial business or profession that has a bearing on an inspection;

(c) require information to be given about a document, record, article, reporting entity, undertaking, business or other premises by—

(i) the owner of the reporting entity, undertaking, business or premises of a designated non-financial business or profession;

(ii) the person in control of the reporting entity, undertaking, business or premises of a designated non-financial business or profession;

(iii) the person who has control of the document, article, record, reporting entity, undertaking, business or premises of a designated non-financial business or profession; or

(iv) any other person who may have the information;

(d) take extracts from, or make copies of, a book, record, licence, permit or document found in a reporting entity or undertaking, business or premises of a designated non-financial business or profession that has a bearing on an inspection;

(e) use a computer system in a reporting entity or undertaking, business or premises of a designated non-financial business or profession or require the assistance of a person in a reporting entity, undertaking, business or premises to use that computer system to—

(i) search any data contained in, or available to, the computer system;

(ii) reproduce any record from the data; or

(iii) seize any output from the computer for examination and copying; and

(f) attach and, if necessary, remove from a reporting entity or undertaking, business or premises of a designated non-financial business or profession for examination and safeguarding any document, matter, material, substance or article that has a bearing on an inspection.

(2) The books and records required to be produced shall not, in the course of inspection, be removed from the premises of the reporting entity or other premises at which they are produced.

(3) An inspector who removes a document, matter, material, substance or article from a reporting entity, undertaking, business or premises under paragraph (g) of sub-section (1) shall—

(a) issue a receipt for the document, matter, material, substance or article to the owner of, or person in control of, the facility, plant, undertaking, business or premises; and

(ii) the Director of Public Prosecutions advises the Centre, in writing, that no prosecution shall be instituted in relation to the matter, material, substance or article.

(4) A person who—

(a) delays or obstructs an inspector in the performance of the inspector’s functions under this Act;

(b) refuses to give an inspector such reasonable assistance as the inspector requires for the purposes of exercising the inspector’s powers;

(c) fails to give an inspector the information, document or record required or gives an inspector false or misleading information in answer to an inquiry made by the inspector; or

(d) impersonates or falsely represents oneself to be an inspector;

commits an offence and is liable, upon conviction, to a fine not exceeding two hundred thousand penalty units or to imprisonment for a period not exceeding two years, or to both.

(5) An inspector shall furnish the Director-General with a written report and any other information relating to an inspection as the Director-General may require.

(6) All information obtained in the course of the inspection shall be treated as confidential and used solely for the purpose of this Act.

(7) Nothing in this section requires a person to disclose or produce information or a document that is classified or which falls under the State Security Act.

[S 11B ins by s 8 of Act 4 of 2016.]

12. Immunity of officers

An action shall not lie against the <PN:"Director-GeneralDirector-General, officers or staff of the Centre or any person acting under the authority of the <PN:"Director-GeneralDirector-General for anything done or omitted to be done in good faith in the discharge of any functions, duties or powers under this Act.

13. Disapplication of secrecy obligations

The provisions of this Act shall have effect notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed under any written law or otherwise.

14. Immunity from execution of judgments

Where any judgment order is obtained against the Centre, no execution, attachment or process of any nature, shall be issued against the Centre or against any property of the Centre, but the Board shall cause to be paid out of its revenues such amount as may, by the judgment order, be awarded against the Centre to the person entitled to such amount.

PART IIIPREVENTION OF MONEY LAUNDERING, FINANCING OF TERRORISM OR PROLIFERATION AND OTHER SERIOUS OFFENCES

[Heading am by s 9 of Act 4 of 2016.]

15. Prohibition of establishment of anonymous accounts

A reporting entity shall not establish or maintain an anonymous account or any account in a fictitious name.

16. Customer identification requirements

(1) A reporting entity shall identify its customers and verify its customers’ identities by means of reliable and independent source documents or information, where—

(a) opening an account for, or otherwise establishing a business relationship with, a customer;

(b) the customer, who is neither an account holder nor in an established business relationship with a financial institution, wishes to carry out a transaction in an amount equal to, or above, such amount as may be prescribed, whether conducted as a single transaction or several transactions that appear to be linked:

Provided that if the amount of the transaction is unknown, the customer’s identification shall be verified as soon as the amount of the transaction has reached the prescribed amount;

(c) notwithstanding paragraph (b), the customer wishes to carry out a domestic or international wire transfer of monetary amounts in the amount equal to, or above, the prescribed amount;

(d) doubts exist about the veracity or adequacy of previously obtained customer identification information; or

(e) there is a suspicion of money laundering, financing of terrorism or proliferation or any other serious offence involving the customer or the customer’s account.

[S 16(1)(e) am by s 10(a) of Act 4 of 2016.]

(2) For the purposes of this Part, “independent source document or information” means a passport, a driver’s license, a national identification document or a certified certificate of incorporation or such other information as the Minister may prescribe.

(3) A reporting entity shall identify and verify the identity of each customer, and obtain other information required by this section before it establishes an account or a business relationship, or before it carries on further business, if it suspects money laundering, financing of terrorism or proliferation or any other serious offence or doubts the veracity or adequacy of previously obtained customer identification information.

[S 16(3) am by s 10(b) of Act 4 of 2016.]

(4) The Minister may prescribe the circumstances in which the verification of identity may be completed as soon as reasonably practicable after the commencement of the business if—

(a) the risk of money laundering or financing of terrorism or proliferation is effectively managed; and

[S 16(4)(a) am by s 10(c) of Act 4 of 2016.]

(b) a delay in verification is essential not to interrupt the normal conduct of business.

(5) A reporting entity shall, with respect to each customer, obtain and verify, as part of its obligation under sub-section (1)—

(a) for a natural person, the full name and address, and date and place of birth;

(b) for a legal person, the corporate name, head office address, identities of directors, proof of incorporation or similar evidence of legal status and legal form, provisions governing the authority to bind the legal person, and such information as is necessary to understand the ownership and control of the legal person;

(c) for legal arrangements, the name of the trustees, the settler and the beneficiary of express trusts, and any other parties with authority to manage, vary or otherwise control the arrangement;

(d) in addition to the identity of a customer, the identity of any person acting on behalf of the customer, including evidence that such person is properly authorised to act in that capacity;

(e) information on the intended purpose and nature of each business relationship; and

(f) sufficient information about the nature and business of the customer to permit the reporting entity to fulfill its obligations under this Act.

(6) A reporting entity shall, as part of its obligations under sub-sections (1) and (5), identify the beneficial owner and shall take such reasonable measures as are necessary to verify the identity of the beneficial owner:

Provided that the Minister may prescribe the circumstances, such as the ownership of publicly held corporations, in which such identification and verification is not necessary.

(7) A reporting entity shall apply the identification and verification requirements stipulated under sub-sections (1) and (5) to customers and beneficial owners with which it had a business relationship at the time of the coming into force of this Act on a risk sensitive basis depending on the type and nature of the customer, business relationship, product or transactions, or as may otherwise be prescribed by the Minister.

17. Reliance on identification by third party

(1) A reporting entity may rely on an intermediary or other third party to perform the customer identification required under sub-section (1) of section 16, where—

(a) there is no suspicion of money laundering, the financing of terrorism or proliferation or any other serious offence;

[S 17(1)(a) am by s 11 of Act 4 of 2016.]

(b) information on the identity of each customer and beneficial owner is provided immediately on opening of the account or commencement of the business relationship; and

(c) the reporting entity is satisfied that the third party—

(i) is able to provide, without delay, copies of identification information and other documents relating to the obligation of due diligence upon request; and

(ii) is established in, or is subject to, the jurisdiction of a State where such person is subject to the requirements equivalent to those specified in this Act, and is supervised for compliance with those requirements in a manner equivalent to those applicable in the Republic.

(2) The third party referred to in paragraph (c) of sub-section (1) shall not claim professional privilege or a similar principle or rule with respect to the customer identification and beneficial ownership information and documentation involved.

(3) The Minister may, on the recommendation of the Centre, prescribe those jurisdictions that the Minister considers fulfill the terms of subparagraph (ii) of paragraph (c) of sub-section (1).

(4) Notwithstanding any other provision in this section, a reporting entity relying on a third party has the ultimate responsibility for compliance with this Act, including all of the due diligence and reporting requirements thereof.

18. Customers not physically present

A reporting entity shall, where it conducts any business relationship or executes transactions with a customer that is not physically present for purposes of identification—

(a) take adequate measures to address the specific risk of money laundering, financing of terrorism or proliferation and any other serious offence;

[S 18(a) am by s 12 of Act 4 of 2016.]

(b) ensure that the due diligence conducted is no less effective than where the customer appears in person; and

(c) require additional documentary evidence or supplementary measures to verify or certify the documents supplied by the customer, or confirmatory certification from financial institutions or other documentary evidence or measures as may be prescribed.

19. High risk customers and politically-exposed persons

A reporting entity shall have appropriate risk management systems to—

(a) identify customers whose activities may pose a high risk of money laundering and financing of terrorism or proliferation and shall exercise enhanced identification, verification and ongoing due diligence procedures with respect to such customers; and

[S 19(a) am by s 13(b) of Act 4 of 2016.]

(b) determine if a customer or a beneficial owner is a high risk customer and politically-exposed person and if so shall—

[S 19(b) am by s 13(d) of Act 4 of 2016.]

(i) obtain approval from senior management of the reporting entity before establishing a business relationship with the customer, or later, as soon as an existing customer is identified as a high risk customer and politically-exposed person;

[S 19(b)(i) am by s 13(d) of Act 4 of 2016.]

(ii) take all reasonable measures to identify the source of wealth and funds and other assets of the customer; and

(iii) provide increased and ongoing monitoring of the customer and the business relationship to prevent money laundering, financing of terrorism or proliferation or the commission of any other serious offences and to permit the reporting entity to fulfil its obligations under this Act, including all of its due diligence and reporting requirements.

A financial institution shall, where it enters into any cross border correspondent banking relationship—

(a) identify and verify the identification of respondent institutions with which it conducts correspondent banking relationships;

(b) collect information on the nature of the respondent institution’s activities;

(c) based on publicly available information, evaluate the respondent institution’s reputation and the nature of supervision to which it is subject;

(d) obtain approval from senior management of the reporting entity before establishing a correspondent banking relationship;

(e) evaluate the controls implemented by the respondent institution with respect to anti money laundering and combating the financing of terrorism or proliferation;

[S 20(e) am by s 14 of Act 4 of 2016.]

(f) establish an agreement on the respective responsibilities of each party under the relationship;

(g) in the case of a payable through account, ensure that the respondent institution has verified its customer’s identity, has implemented mechanisms for ongoing monitoring with respect to its clients, and is capable of providing relevant identifying information on request;

(h) not enter into, or continue, business relations with a shell bank; and

(i) not enter into, or continue, business relations with a respondent financial institution in a foreign country if the respondent institution permits its accounts to be used by a shell bank.

21. Inability to fulfill customer identification obligations

A reporting entity that fails or is likely to fail to fulfill the requirements of sections 16 to 20 with respect to any customer shall not establish an account for, or maintain the business relationship with, that customer, and shall make a report to the Centre in accordance with this Act.

22. Record keeping

(1) A reporting entity shall maintain all the books and records with respect to its customers and transactions as set out in sub-section (2), and shall ensure that such records and the underlying information are available, on a timely basis, to the Centre a supervisory authority and a law enforcement agency.

[S 22(1) am by s 15(a) of Act 4 of 2016.]

(2) The books and records referred to in sub-section (1) shall include, as a minimum—

(a) account files, business correspondence and copies of documents evidencing the identities of customers and beneficial owners obtained in accordance with the provisions of this Act, which shall be maintained for not less than 10 years after the business relationship has ended;

(b) records on transactions sufficient to re-construct each individual transaction for both account holders and non account holders, which shall be maintained for not less than 10 years from the date of the transaction;

(c) the findings set in writing pursuant to paragraph (c) of sub-section (1) of section 25 and related transaction information, which shall be maintained for at least 10 years from the date of the transaction; and

(d) copies of all suspicious transaction reports made pursuant to section 29, including any accompanying documentation, which shall be maintained for at least 10 years from the date the report was made.

(3) A reporting entity shall keep the records referred to in sub-section (1) by way of original documents in the form of hard copies or in an electronic form in an electronic storage device.

[S 22(3) ins by s 15(b) of Act 4 of 2016.]

23. Internal programmes to combat money laundering financing of terrorism or proliferation and other serious offences

(1) A reporting entity shall develop and implement programmes for the prevention of money laundering, financing of terrorism or proliferation and any other serious offence.

[S 23(1) am by s 16(a) of Act 4 of 2016.]

(2) The programmes referred to in sub-section (1) shall include the following—

(a) internal policies, procedures and controls to fulfil obligations pursuant to this Act;

(c) ongoing training for officers and employees to make them aware of the laws relating to money laundering, the financing of terrorism or proliferation and any other serious offence, to assist them in recognising transactions and actions that may be linked to money laundering, financing of terrorism or proliferation and any other serious offence and instruct them in the procedures to be followed in such cases;

[S 23(2)(c) am by s 16(a) of Act 4 of 2016.]

(d) policies and procedures to prevent the misuse of technological developments including those related to electronic means of storing and transferring funds or value;

(e) mechanisms for preventing money laundering, financing of terrorism or proliferation, financial crime and any other serious offence generally; and

[S 23(2)(e) am by s 16(a) of Act 4 of 2016.]

(f) independent audit arrangements to review and verify compliance with and effectiveness of the measures taken in accordance with this Act.

(3) A reporting entity shall designate a compliance officer at management level to be responsible for the implementation of, and ongoing compliance with, this Act by the reporting entity.

(4) A person shall not be appointed as a compliance officer unless that person has—

(i) two years experience in the field of regulatory compliance;

(ii) not been convicted of an offence under this Act or any other law; and

(iii) been approved by the Centre.

[S 23(4) ins by s 16(b) of Act 4 of 2016.]

(5) A compliance officer designated pursuant to sub-section (3) shall have ready access to all the books, records and employees of the reporting entity necessary to fulfil the responsibilities specified under this Act.

[S 23(4) renumbered as s 23(5) by s 16(c) of Act 4 of 2016.]

(6) The Minister may prescribe the type and extent of measures that reporting entities shall undertake with respect to each of the requirements in this section having regard to the risk of money laundering, financing of terrorism or proliferation and any other serious offence and the size of the business or profession.

[S 23(5) am by s 16(a) and renumbered as s 23(6) by s 16(c) of Act 4 of 2016.]

24. Ongoing due diligence

A reporting entity shall exercise ongoing due diligence with respect to any business relationship with a customer which shall include—

(a) maintaining current information and records relating to the customer or beneficial owner; and

(b) ensuring the obligations pursuant to sections 19 and 20 relating to high risk customers and correspondent banking relationships are fulfilled.

25. Special monitoring of certain transactions

(1) A reporting entity shall—

(a) pay special attention to business relations and transactions with persons, including legal persons and arrangements, from or in countries that do not or insufficiently apply the relevant international standards to combat money laundering, the financing of terrorism and any other serious offence;

[S 25(1)(a) am by s 17(a) of Act 4 of 2016.]

(b) take such specific measures as may be prescribed to counter the risks with respect to business relations.

(c) examine all complex, unusual and large transactions and patterns of transactions that have no apparent economic or lawful purpose; and

[S 25(1)(c) ins by s 17(b) of Act 4 of 2016.]

(d) examine the background and purpose of transactions under paragraphs (a) and (b) and make its findings in writing.

[S 25(1)(d) ins by s 17(b) of Act 4 of 2016.]

(2) The findings referred to in sub-section (1), shall be maintained as specified in section 22 and shall be made available promptly if requested by the Centre, a supervisory authority or law enforcement agency.

26. Obligations regarding wire transfers

(1) A financial institution undertaking any wire transfers equal to, or above, such amount as may be prescribed shall—

(a) identify and verify the identity of the originator;

(b) obtain and maintain the account number of the originator, or in the absence of an account number, a unique reference number;

(c) obtain and maintain the originator’s address or, in the absence of address, the national identity number, or date and place of birth; and

(d) include information from paragraphs (a) to (c) in the message or payment form accompanying the transfer.

(2) Notwithstanding the requirements of sub-section (1), a financial institution is not required to verify the identity of a customer with which it has an existing business relationship where it is satisfied that it already knows and has verified the true identity of the customer.

(3) Where a financial institution acts as an intermediary in a chain of payments, it shall re-transmit all of the information it received with the wire transfer.

(4) The Minister may, on the recommendation of the Centre, by statutory instrument, modify the requirements set out in sub-section (1)—

(a) with respect to domestic wire transfers, as long as the regulations provide for full originator information to be made available to the beneficiary financial institution and appropriate authorities by other means; and

(b) with respect to cross border transfers where individual transfers from a single originator are bundled in a batch file, as long as the regulations provide for the originator’s account number or unique reference number to be included, and that the batch file contains full originator information that is fully traceable in the recipient country.

(5) Sub-sections (1) and (2) shall not apply to transfers executed as a result of credit card or debit card transactions or to transfers between financial institutions acting for their own account:

Provided that the credit card or debit card number accompanies the transfer resulting from the transaction.

(6) Where a financial institution referred to in sub-section (1) receives wire transfers that do not contain the complete originator information required under that sub-section, it shall take measures to obtain and verify the missing information from the ordering institution or the beneficiary.

(7) A financial institution shall, where it fails to obtain any missing information, refuse acceptance of the transfer and report it to the Centre.

27. Compliance with obligations by foreign subsidiaries and branches

(1) A financial institution shall require its foreign branches and majority owned subsidiaries to implement the requirements of this Part to the extent that domestic applicable laws of the host country so permit.

(2) A financial institution shall, where the laws of the country where its branch or majority owned subsidiary is situated prevent compliance with the obligations stipulated under this Part, advise its supervisory authority, which may take such steps as it believes to be appropriate to accomplish the purposes of this Act.

28. Prohibition against shell banks

A shell bank shall not be established or permitted to operate in or through the territory of Zambia.

29. Obligation to report suspicious transactions

(1) Subject to the provisions of sub-sections (2) and (3), a reporting entity or a director, principal officer, partner, professional or employee of a reporting entity, that suspects or has reasonable grounds to suspect that any property—

[S 29(1) am by s 18 of Act 4 of 2016.]

(a) is the proceeds of crime; or

(b) is related or linked to, or is to be used for, terrorism, terrorist acts or by terrorist organisations or persons who finance terrorism; shall, not later than three working days after forming the suspicion, submit a report setting out the suspicions to the Centre.

(2) Sub-section (1) shall apply to attempted transactions.

(3) Notwithstanding sub-section (1), a legal practitioner, a notary public or an accountant shall submit a report under sub-section (1) if—

(a) the legal practitioner, notary public or accountant engages, on behalf of or for a client, in a financial transaction associated with an activity specified in relation to such professionals under this Act; and

(b) the relevant information upon which the suspicion is based was not received from, or obtained on, a client—

(i) in the course of ascertaining the legal position of the client; or

(ii) in performing their task of defending or representing that client in, or concerning judicial, administrative, arbitration or mediation proceedings, including advice on instituting or avoiding proceedings, whether such information is received or obtained before, during or after such proceedings.

(4) A financial institution shall refrain from carrying out a transaction which it suspects to be related to money laundering, financing of terrorism or any other serious offence.

(5) The Centre shall issue guidelines on the procedures for and form in which the suspicious transaction reports shall be submitted and shall publish guidance in order to assist reporting entities to fulfil their obligations under this section.

30. Obligation to report currency transactions

A reporting entity shall, promptly but not later than three working days, submit a report to the Centre on any currency transaction in an amount equal to or above the prescribed amount, whether conducted as a single transaction or several transactions that appear to be linked.

31. Disclosing information regarding compliance

Where it appears to a supervisory authority that a reporting entity, or any of its directors, officers or employees, is not complying, or has not complied, with the obligations set out in this Act, it shall immediately inform the Centre accordingly.

32. Inapplicability of confidentiality provisions

No secrecy or confidentiality provision in any other law shall prevent a reporting entity from fulfilling its obligations under this Act.

33. Prohibition against tipping off

(1) A reporting entity or any director, partner, officer, principal or employee of the reporting entity shall not disclose to its customer or a third party that a report or any other information concerning suspected money laundering, financing of terrorism or any other serious offence shall be, is being or has been, submitted to the Centre, or that a money laundering, financing of terrorism or any other serious offence investigation is being, or has been, carried out, except in the circumstances set out in sub-section (2) or where otherwise required by law to do so.

(2) Sub-section (1) shall not apply to a disclosure which—

(a) is made to carry out a function that a person has relating to the enforcement of any provision of this Act or of any other law; or

(b) in the case of a legal practitioner or accountant acting as an independent professional, when seeking to dissuade a client from engaging in an illegal activity; that a suspicious transaction report shall be made, is being made or has been made to the Centre.

(3) A person who contravenes sub-section (1) commits an offence and is liable, upon conviction, to a fine not exceeding five hundred thousand penalty units or to imprisonment for a period not exceeding five years, or to both.

34. Protection of identity of persons and information relating to suspicious transaction reports

(1) Except for the purposes of the administration of this Act, a person shall not disclose any information to identify or that is likely to identify the person who prepared or made a suspicious transaction report, or handled the underlying transaction.

(2) A person shall not be required to disclose a suspicious transaction report or any information contained in the report or provided in connection with it, or the identity of the person preparing or making such a report or handling the underlying transaction in any judicial proceeding unless the court is satisfied that the disclosure of the information is necessary in the interests of justice.

35. Exemption from liability for good faith reporting of suspicious transactions

(1) Criminal, civil, disciplinary or administrative proceedings for breach of banking or professional secrecy or contract shall not lie against a reporting entity, its directors, principals, officers, partners, professionals or employees who, in good faith, submit reports or provide information in accordance with the provisions of this Act.

(2) Civil, criminal or disciplinary proceedings shall not be brought against a person who—

(a) discloses or supplies any information in any report made under this Act; or

(b) supplies any information in connection with a report, whether at the time the report is made or afterwards, in respect of—

(i) the disclosure or supply, or the manner of the disclosure or supply, by that person, of the information referred to in paragraph (a); or

(ii) any consequences that follow from the disclosure or supply of that information, unless the information was disclosed or supplied in bad faith.

36. Duties of supervisory authorities

(1) Where a supervisory authority has reasonable grounds to believe that a business transaction indicates that a person has or may have been engaged in money laundering, the financing of terrorism or any other serious offence, it shall disclose, or cause to be disclosed, that information to the Centre.

(2) A supervisory authority shall monitor and ensure compliance by reporting entities with their obligations under this Act.

(3) A supervisory authority may—

(a) compel the production of any information from reporting entities required for purposes of this Act; and

(b) impose sanctions for any failure by reporting entities to comply with their obligations under this Act.

(4) A supervisory authority may publish such directives as it may, in consultation with the Centre, determine which are necessary for reporting entities to comply with their reporting obligations under this Act.

(5) A supervisory authority may appoint a suitably qualified employee of the supervisory authority as an inspector for purposes of monitoring compliance with this Act.

[S 36(5) ins by s 19 of Act 4 of 2016.]

(6) An inspector appointed pursuant to sub-section (5) shall have the same powers as an inspector appointed under section 11A.

[S 36(6) ins by s 19 of Act 4 of 2016.]

36A. Register of reporting entities

The Centre shall maintain a register of all reporting entities, which shall contain such particulars as are prescribed.

[S 36A ins by s 20 of Act 4 of 2016.]

37. Powers to enforce compliance

(1) An officer of a reporting entity shall take all reasonable steps to ensure the reporting entity’s compliance with its obligations under this Act.

(2) The Centre shall, upon application to the High Court and satisfying the High Court that a reporting entity has failed, without reasonable excuse, to comply in whole or in part with any obligation under this Act, obtain an order against the reporting entity, an officer or employee of the reporting entity on such terms as the High Court considers necessary to enforce compliance with such obligation.

[S 37(2) subs by s 21 of Act 4 of 2016.]

(3) Notwithstanding sub-section (2), the Centre may direct or enter into an agreement with any reporting entity that has, without reasonable excuse, failed to comply, in whole or in part, with any obligations in this Part to implement any action plan to ensure compliance with its obligations under this Part.

(4) A person who contravenes the provisions of sub-section (1) or sub-section (2) commits an offence and is liable, upon conviction, to a fine not exceeding four hundred thousand penalty units or to imprisonment for a period not exceeding four years, or to both.

(5) In determining whether a reporting entity or an officer or employee of a reporting entity has complied with any of the requirements of sub-section (1), a court may take account of the directives issued by a supervisory authority.

(6) A reporting entity may, in addition to the penalties set out in this section be liable to additional administrative sanctions imposed by a supervisory authority.

37A. Monitoring order

(1) A court may, on ex parte application made by the Centre, make a monitoring order requesting a reporting entity to make a transaction report to the Centre.

(2) A monitoring order may state that a reporting entity shall report transactions conducted by the specified reporting entity and transactions conducted in respect of a specified account or facility at the reporting entity if there are reasonable grounds to suspect that—

(a) a person has transferred or may transfer the proceeds of an unlawful activity through the reporting entity or is using or may use the reporting entity for money laundering or financing of terrorism or proliferation; and

(b) the account or facility has received or may receive the proceeds of an unlawful activity or is being or may be used for money laundering or financing of terrorism or proliferation.

(3) A monitoring order lapses after 90 days from the date it is made, except that before the expiry of the period, the Centre may apply to the court to extend the order for a further period not exceeding 90 days at a time if—

(a) the grounds on which the order is based still exist; and

(b) the court is satisfied that the interest of justice may best be served by monitoring the person, account or facility referred to in sub-section (1) and in the manner provided for in this section.

[S 37A ins by s 22 of Act 4 of 2016.]

37B. Notice to comply

The Director-General may, by notice in writing, and after giving the reporting entity a reasonable opportunity to be heard, require the reporting entity to comply by the date or within the period specified therein, with any directive contained in the notice in connection with any matter arising out of a report issued following an inspection.

[S 37B ins by s 22 of Act 4 of 2016.]

37C Compliance order

(1) The Director-General may, where the Director-General reasonably determines that any condition of a directive issued under this Act has been breached, serve a compliance order on the reporting entity requiring the reporting entity to remedy the breach within the period stipulated in the order.

(2) A compliance order issued under sub-section (1) may—

(a) suspend a business activity of a reporting entity or person with immediate effect if the Director-General considers that the suspension is necessary to prevent or mitigate an imminent risk of significant adverse effects of money laundering and financing of terrorism or proliferation occurring; or

(b) require the reporting entity or person to take specified measures to prevent or abate any adverse effect.

(3) The Centre may, where a reporting entity fails to comply with a compliance order take the necessary steps to remedy the breach and recover the cost from the reporting entity.

(4) A reporting entity or person in respect of which a compliance order is served shall comply with the requirements of the order by the date specified in the order and if no date is specified, the person shall comply with the order immediately.

(5) A person who contravenes sub-section (4) commits an offence and is liable, upon conviction, to a fine not exceeding three hundred thousand penalty units or to imprisonment for a period not exceeding three years, or to both.

(6) If the reporting entity or person fails to comply with a requirement specified in the compliance order within the specified time, the reporting entity or person is liable to a further fine not exceeding two thousand penalty units for each day or part of a day after the date specified in the order during which the offence continues.

[S 37C ins by s 22 of Act 4 of 2016.]

38. Financial instrument reporting at borders

(1) Notwithstanding any other written law, a person leaving or entering Zambia with an amount in cash, negotiable bearer instruments or both, exceeding such value as the Minister may prescribe by statutory instrument, shall declare to a customs officer such amount in such form as may be prescribed.

(2) A person who contravenes sub-section (1) commits an offence and is liable, upon conviction, to a fine not exceeding one hundred thousand penalty units or to imprisonment for a period not exceeding one year, or to both.

(3) A declaration required to be made or given under sub-section (1) shall, for the purposes of the Customs and Excise Act be deemed to be a declaration in a matter relating to customs.

(4) A customers officer may seize any cash, negotiable bearer instruments or both, which are liable to seizure, in terms of Part XII of the Customs and Excise Act.

(1) A person shall not, without the consent in writing given by, or on behalf of, the Board, publish or disclose to any unauthorised person, otherwise than in the course of duties of that person, the contents of any document, communication or information whatsoever, which relates to or which has come to the knowledge of that person in the course of that person’s duties under this Act.

(2) A person who contravenes sub-section (1) commits an offence and is liable, upon conviction, to a fine not exceeding two hundred thousand penalty units or to imprisonment for a period not exceeding two years, or to both.

(3) A person who, having any information which to the knowledge of that person, has been published or disclosed in contravention of sub-section (1), unlawfully publishes or communicates the information to any other person, commits an offence and is liable, upon conviction, to a fine not exceeding two hundred thousand penalty units or to imprisonment for a period not exceeding two years, or to both.

40. Communication with foreign competent authorities

Notwithstanding any other written law, the Centre may communicate anything disclosed to it under this Act to a foreign designated authority if—

(a) the <PN:"Director-GeneralDirector-General considers the disclosure necessary to enable the foreign designated authority to discharge its functions of receipt, requesting, analysis and dissemination of suspicious transaction reports;

(b) there exists an arrangement between Zambia and the foreign State under which the foreign designated authority has agreed to communicate to Zambia, upon Zambia’s request, information received by the foreign designated authority that corresponds to anything required to be disclosed to the Centre under this Act; or

(c) the Centre is satisfied that the foreign designated authority has given appropriate undertakings—

(i) for protecting the confidentiality of anything communicated to it; and

(ii) for controlling the use that will be made of the thing disclosed, including an undertaking that it will not be used as evidence in any proceedings.

41. No order for production of information

Notwithstanding the provisions of any other written law, no order for the production of information, document or evidence shall be issued in respect of the Centre or against the Minister, <PN:"Director-GeneralDirector-General, officers or other staff of the Centre or any person engaged pursuant to this Act.

PART IVOFFENCES AND PENALTIES

42. Failure to comply with identification requirements

A person who intentionally or negligently—

(a) fails to undertake the identification of customers or otherwise to fulfil the customer identification and risk management requirements in accordance with section 16;

(b) opens an anonymous account or an account in a fictitious name for a customer in violation of section 15; or

(c) fails to fulfill the obligations relating to the obtaining of information for and processing of a wire transfer as required under section 26; commits an offence and is liable, upon conviction, to a fine not exceeding one million penalty units or to imprisonment for a period not exceeding 10 years, or to both.

43. Failure to maintain or provide access to records

A person who intentionally or negligently—

(a) fails to maintain books and records as required by section 22;

(b) destroys or removes any records or books; or

(c) fails to make information available in a timely manner in response to a lawful request for any books or records; commits an offence and is liable, upon conviction, to a fine not exceeding two hundred thousand penalty units or to imprisonment for a period not exceeding two years, or to both.

(a) fails to conduct due diligence with respect to customers, accounts and transactions in compliance with section 24;

(b) fails to comply with the obligations for special monitoring set out in section 25; or

(c) fails to maintain internal control programmes in compliance with section 23; commits an offence and is liable, upon conviction, to a fine not exceeding five hundred thousand penalty units or to imprisonment for a period not exceeding five years, or to both.

45. Failure with regard to suspicious transaction or other reporting

A person who intentionally or negligently fails to submit a report to the Centre as required by section 29 or 30 commits an offence and is liable, upon conviction, to a fine not exceeding seven hundred thousand penalty units or to imprisonment for a period not exceeding seven years, or to both.

[S 45 am by s 23 of Act 4 of 2016.]

45A. Conducting transaction to avoid reporting duty

A person who intentionally or negligently conducts multiple transactions separately with one or more reporting entities in order to avoid the duty to report a transaction or in breach of the duty to disclose information under this Act, commits an offence and is liable, upon conviction, to a fine not exceeding seven hundred thousand penalty units or to imprisonment for a period not exceeding seven years, or to both.

[S 45A ins by s 24 of Act 4 of 2016.]

46. False or misleading statement

A person who intentionally makes a false or misleading statement, provides false or misleading information, or otherwise fails to state a material fact in connection with such person’s obligations under this Part, including the obligation to make a suspicious transaction report, commits an offence and is liable, upon conviction, to a fine not exceeding five hundred thousand penalty units or to imprisonment for a period not exceeding five years, or to both.

47. Confidentiality violation

A person who intentionally or negligently discloses to a customer or a third party information contrary to this Act, commits an offence and is liable, upon conviction, to a fine not exceeding five hundred thousand penalty units or to imprisonment for a period not exceeding five years, or to both.

48. Setting up shell bank

A person who intentionally or negligently—

(a) sets up a shell bank in the Republic; or

(b) enters into or continues business relations with a shell bank or a respondent financial institution in a foreign country that permits its accounts to be used by a shell bank; commits an offence and is liable, upon conviction, to a fine not exceeding one million penalty units or to imprisonment for a period not exceeding 10 years, or to both.

49. General penalty

A person convicted of an offence under this Act—

(a) is subject, in addition, to the sanctions and measures available to the supervisory authority for administrative violations; and

(b) may be banned permanently, or for such period as the Minister may prescribe, from pursuing the business or profession which provided the opportunity for the offence to be committed.

A person who unduly influences, obstructs, hinders, interferes with or threatens or attempts to unduly influence, obstruct, hinder, interfere with or threaten an official or representative of the Centre, while in the performance of their duties or the exercise of their powers in terms of this Act, commits an offence is liable, upon conviction, to a fine not exceeding one hundred thousand penalty units or to imprisonment for a period not exceeding one year, or to both.

[S 49A ins by s 25 of Act 4 of 2016.]

49B. Administrative sanctions

(1) The Centre or a supervisory authority may, where a reporting entity is in breach of a provision of this Act which is not a criminal offence impose one or more of the following administrative sanctions—

(a) a caution not to repeat the conduct which led to the non-compliance with a provision of this Act;

(b) a reprimand;

(c) a directive to take remedial action or to make specific arrangements to redress identified non-compliance;

(d) the restriction or suspension of certain specified business activities;

(e) publication of a public notice of any prohibition or requirement imposed by the Centre or a supervisory authority under this Part and of any rescission or variation thereof, and the notice may, if the Centre or supervisory authority considers necessary, include a statement of the reason for the prohibition, requirement, variation or rescission; and

(f) a financial penalty not exceeding one million penalty units;

(g) a reporting entity or person may within 30 days of receipt of administrative sanction, appeal to the High Court against an administrative sanction imposed by the Centre or a supervisory authority.

(2) The factors to be considered by the Centre or a supervisory authority when determining an appropriate administrative sanction includes—

(a) the nature, duration, seriousness and extent of the relevant non-compliance;

(b) whether the reporting entity or person has previously failed to comply with any law;

(c) any remedial steps taken by the reporting entity or person to prevent a recurrence of the non-compliance;

(d) any steps taken or to be taken against the reporting entity or person by—

(i) another supervisory authority; or

(ii) a professional association which the reporting entity or person is a member;

(iii) any other relevant factors, including mitigating factors.

(3) Before imposing an administrative sanction, the Centre or supervisory authority shall give the reporting entity or person 14 days notice in writing specifying—

(a) the nature of the alleged non-compliance;

(b) the intention to impose an administrative sanction;

(c) amount or particulars of the intended administrative sanction; and

(d) that the reporting entity or person may, in writing, within a period specified in the notice, make representations as to the reasons the administrative sanction should not be imposed.

[S 49B ins by s 25 of Act 4 of 2016.]

PART VGENERAL PROVISIONS

50. Mutual legal assistance

The Mutual Legal Assistance in Criminal Matters Act applies to offences under this Act, except where the provisions of that Act are inconsistent with this Act.

51. Extradition

An offence under this Act shall be deemed to be an extraditable offence under the provisions of the Extradition Act.

52. Offences by body corporate or unincorporate body

Where an offence under this Act is committed by a body corporate or unincorporate body, every director or manager of the body corporate or unincorporate body shall be liable, upon conviction, as if the director or manager had personally committed the offence, unless the director or manager proves to the satisfaction of the court that the act constituting the offence was done without the knowledge, consent or connivance of the director or manager or that the director or manager took reasonable steps to prevent the commission of the offence.

53. Offences committed outside jurisdiction

(1) This Act shall have effect within as well as outside Zambia and notwithstanding where the offence is committed by any person, that person may be dealt with in respect of such offence as if it has been committed within Zambia.

(2) Any proceedings against any person under this section which would be a bar to subsequent proceedings against such person for the same offence, if such offence had been committed in Zambia, shall be a bar to further proceedings against that person under any written law for the time being in force relating to the extradition of persons, in respect of the same offence outside Zambia.

54. Monitoring effectiveness of system

(1) The Centre shall implement a system for monitoring the effectiveness of anti-money laundering and counter-financing of terrorism policies by maintaining comprehensive statistics on—

(a) suspicious transaction or suspicious activity reports received and transmitted to law enforcement agencies;

(b) money laundering, terrorism financing and any other serious offence investigations and convictions;

(c) property frozen, seized and confiscated; and

(d) international requests for mutual legal assistance or other co-operation.

(2) The Centre shall, as far as is practicable, provide information to a reporting entity on the action taken by the Centre with regard to a suspicious transaction report.

55. Annual report

(1) The Centre shall, as soon as practicable, but not later than 90 days after the end of its financial year, submit to the Minister a report concerning its activities during the financial year.

(2) The report referred to in sub-section (1) shall include information on—

(a) the statistics on money laundering, financing of terrorism and any other serious offence including typologies, trends and other observable statistical patterns; and

(b) such other information as the Minister may require.

(3) The Minister shall, not later that seven days after the first sitting of the National Assembly next after receipt of the report referred to in sub-section (1), lay the report before the National Assembly.

56. Centre to issue directives, guidelines, rules, instructions, etc.

(1) The Centre may, in the exercise of its functions under this Act issue, in such manner as the Centre determines, such instructions, directives, guidelines or rules to reporting entities as it considers necessary for the better carrying out of its functions under this Act or regarding the application of this Act.

(2) An instruction, directive, guideline or rule issued by the Centre under this section may—

(a) be either general or specific;

(b) be varied or revoked by subsequent instructions, directions, guidelines or rules; and

(c) be given to such persons and in such manner as the Centre considers appropriate

(3) The Centre may, where it considers appropriate, require a supervisory authority to issue an instruction, direction, guideline or rule regarding the application of this Act to a reporting entity regulated or supervised by the supervisory authority.

(4) A supervisory authority that intends to issue an instruction, direction, guideline or rule under sub-section (3) shall consult the Centre prior to issuing any instructions, directions, guidelines or rules under this section.

(5) Despite paragraph (e) of sub-section (3) of section 5 of the Act the Centre or a supervisory authority may in writing direct a reporting entity to—

(a) provide the Centre or the supervisory authority, as the case may be—

(i) with information, reports or statistical returns specified in the notice, at the time or at the intervals specified in the notice; and

(ii) within the period specified in the notice,with any document in possession, custody or under the control of a reporting entity;

(b) cease or refrain from engaging in an act, omission or conduct in contravention of this Act;

(c) perform such act as may be necessary to remedy alleged non-compliance with this Act; or

(d) take such other action necessary to meet any obligation imposed by this Act.

(6) The Centre or a supervisory authority may examine a document submitted to it in terms of section 5 of the Act and may make a copy thereof or of part thereof.

[S 56 subs by s 26 of Act 4 of 2016.]

57. Retention of records

The Centre shall retain a record of all suspicious transaction reports and related information that it receives, for a minimum of 15 years after the information is received.

58. Regulations

(1) The Minister may, by statutory instrument, in consultation with the Centre, make regulations that are necessary to give effect to the provisions of this Act.

(2) Without prejudice to the generality of sub-section (1), the regulations made thereunder may—

(a) require reporting entities to establish and maintain procedures relating to the identification of clients, the keeping of records, the making of reports and training;

(b) prescribe offences and penalties for contravention of or failure to comply with the regulations made pursuant to this Act;

(c) provide that contraventions of the regulations may be determined summarily by a court of competent jurisdiction;

(d) provide that in determining whether a person has complied with the regulations the trial court shall take account of any relevant guidelines issued by the Centre; and

(e) prescribe all matters required to be prescribed under this Act.

SCHEDULE

[Section 3(3)]

ADMINISTRATION OF CENTRE

PART ITHE BOARD OF THE CENTRE

1. Proceedings of Board

(1) Subject to the other provisions of this Act, the Board may regulate its own procedure.

(2) The Board shall meet for the transaction of business, at least once in every, three months at such places and times as the Board may determine.

(3) Upon giving notice of not less than 14 days, a meeting of the Board may be called by the Chairperson and shall be called by the Chairperson if not less than one-third of the members so request in writing:

Provided that if the urgency of any particular matter does not permit the giving of such notice, a special meeting may be called upon a shorter notice given by three members of the Board.

(4) The quorum at a meeting of the Board shall be three.

(5) There shall preside at any meeting of the Board—

(a) the Chairperson;

(b) in the absence of the Chairperson, the Vice-Chairperson; and

(c) in the absence of both the Chairperson and the Vice-Chairperson, such member as the members present may elect from amongst themselves for the purpose of that meeting.

(6) A decision of the Board on any question shall be by a majority of votes of the members present and voting at the meeting and, in the event of an equality of votes, the person presiding at the meeting shall have, in addition to a deliberative vote, a casting vote.

(7) The Board may invite any person whose presence is in its opinion desirable to attend and to participate in the deliberations of a meeting of the Board but such person shall have no vote.

(8) The validity of any proceedings, act or decision of the Board shall not be affected by any vacancy in the membership of the Board or by any defect in the appointment of any member or by reason that any person not entitled to do so, took part in the proceedings.

(9) The Board shall cause minutes to be kept of the proceedings of every meeting of the Board and every meeting of any committee established by the Board.

2. Committees of Board

(1) The Board may, for the purpose of performing its functions under this Act, constitute any committee and delegate to any such committee such of its functions as it thinks fit.

(2) The Board may appoint as members of a committee constituted under sub paragraph (1), persons who are or are not members of the Board and such persons shall hold office for such period as the Board may determine.

(3) A committee of the Board may regulate its own procedure.

3. Tenure of office and vacancy

(1) Subject to the other provisions of this Act, a member shall hold office for a period of three years from the date of appointment and may be re-appointed for a further period of three years.

(2) A member may resign upon giving one month’s notice in writing to the President.

[Sch Part I para 3(2) am by s 27 of Act 4 of 2016.]

(3) The office of a member shall become vacant—

(a) upon the death of the member;

(b) if the member is absent, without reasonable excuse, from three consecutive meetings of the Board, of which that member has had notice;

(c) if the member is declared bankrupt;

(d) if the member has a mental disability which makes the member unable to exercise the functions as member; or

(e) if the member is removed by the minister.

(4) The Minister shall, where the office of a member becomes vacant before the expiry of the term of office of the member, appoint another member in place of the member who vacates office, and such member shall hold office for the remainder of the term.

(5) Subject to the other provisions of this Act, a member shall, on the expiration of the period for which the member is appointed, continue to hold office until another member is appointed to succeed that member.

4. Allowances of members

There shall be paid to members of the Board or any committee of the Board such allowances as the Board may, with the approval of the Minister, determine.

5. Disclosure of interest

(1) If a member or person is present at a meeting of the Board or a committee of the Board at which any matter, in which that person or that person’s spouse, is directly or indirectly interested in a private capacity, is the subject of consideration, that person or member shall, as soon as is practicable after the commencement of the meeting, disclose that interest and shall not take part in any consideration or discussion of, or vote on, any question relating to, that matter.

(2) A disclosure of interest made under this paragraph shall be recorded in the minutes of the meeting at which it is made.

PART IIFINANCIAL PROVISIONS

6. Funds of Centre

(1) The funds of the Centre shall consist of such moneys as may—

(a) be appropriated to the Centre by Parliament for the purposes of the Centre;

(b) be paid to the Centre by way of grants or donations; and

(c) otherwise vest in or accrue to the Centre.

(2) The Centre may—

(a) subject to the approval of the Minister, accept moneys by way of grants or donations from any source within or outside Zambia; and

(b) subject to the approval of the Minister, raise such moneys as it may require for the discharge of its functions.

(3) There shall be paid from the funds of the Centre—

(a) the salaries, allowances, loans, gratuities and pensions of the staff of the Centre and other payments for the recruitment and retention of the staff;

(b) such reasonable travelling, subsistence and other allowances for members of the Board or any committee of the Board when engaged in the business of the Centre at such rates as the Board may, with the approval of the Minister, determine; and

(c) any other expenses incurred by the Board in the performance of the Board’s functions under this Act.

(4) The Board may, with the approval of the Minister, invest in such manner as it considers appropriate such funds of the Centre as it does not immediately require for the discharge of its functions.

7. Financial year

The financial year of the Centre shall be the period of 12 months ending on 31st December of each year.

8. Accounts

(1) The Centre shall cause to be kept proper books of account and other records relating to its accounts.

(2) The accounts of the Centre shall be audited annually by the Auditor General or an auditor appointed by the Auditor-General.

(3) The Auditor-General’s fees shall be paid by the Centre.

9. Annual report

(1) As soon as practicable, but not later than 90 days after the end of the financial year, the Centre shall submit to the Minister a report concerning its activities during the financial year.

(2) The report referred to in sub-paragraph (1) shall include information on the financial affairs of the Centre and there shall be appended to the report—

(a) an audited balance sheet;

(b) an audited statement of income and expenditure; and

(c) such other information as the Minister may require.

(3) The Minister shall, not later than seven days after the first sitting of the National Assembly next after receipt of the report referred to in sub-paragraph (1), lay the report before the National Assembly.